Home Loan Tips: Understanding Your Credit Report Can Make All the Difference

by Gabriel Traverso
CMR Columnist

Understanding your credit report can make an enormous difference when it comes to qualifying for your home loan. If you have bad credit, intimate knowledge of your credit report can help you get the best possible deal on a mortgage.

Credit Reports Defined

A credit report is a record of all your credit activities, both past and present. It lists credit cards you've had, their status and balance, as well as how regularly you make your payments. It also shows if you have had any lapses in payment or if any accounts have gone into collections. Your credit rating is drawn directly from the information listed on your credit report. A bad rating could mean you pay more for your home loan than someone with good credit.

Corrections to Your Credit Report

If you identify an error on your credit report, contact the consumer reporting agency immediately. The company is then responsible for researching and correcting any misinformation. Credit information remains on your credit report for 7 years--so any mistakes could have a big impact on your home loan. Bad credit mortgages are given to borrowers who have a negative credit history with outstanding collections accounts, delinquencies, or even bankruptcy. These loans could have higher interest rates and fees.

Bad Credit Mortgages--Do Your Homework!

Never apply for a home loan without first carefully reviewing your credit report. Spending just a little time in preparation could go a long way toward limiting the likelihood of only qualifying for a bad credit mortgage. Check your credit report regularly--you can even get a free copy of your credit report once a year from all three credit reporting agencies by going to www.annualcreditreport.com. An ounce of prevention could save you a pound of heartache and a lot of money down the road!

About the Author
Gabriel Traverso is a freelance writer, professional musician, and artist. He resides with his family in Reno, NV.

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